Foreign IP Disputes on the Increase

China has become a major market for foreign enterprises to develop intellectual property innovation, according to a senior judge from China's top court.

With more frequent economic and trade exchanges, IP disputes involving foreign litigants nationwide rose from 2,840 in 2013 to 5,675 last year.

The figures were disclosed by Song Xiaoming, chief judge of a civil tribunal for IP cases under the Supreme People's Court.

"Foreign-related IP cases are a key area for IP tribunals in courts, especially administrative ones," Song said.

In 2013, 1,143 foreign IP administrative cases were heard by Chinese courts, with the number rising to 4,383 last year, according to the top court. In such lawsuits, government agencies — such as copyright administrations at all levels — are usually the defendants accused of improper official rulings.

Of the IP administrative cases involving foreigners, most were related to patents and trademarks, Song said, adding that those involving business secrets have also risen rapidly in recent years.

A report by IP House, a third-party IP institute that analyzed 5,022 verdicts from 5,432 IP cases heard by the Beijing IP Court recently, found that 1,095 were related to foreign litigants.

Of the foreign cases, 395 involved US enterprises, 2.7 times more than those from Germany, which was second on the list, the institute said.

Among those involving US businesses, 346 were administrative IP cases concerning, for example, trademarks and patents.

"The boom in IP disputes should be attributed to our country's strategy of ‘China going global' and ‘bringing in foreign business', as well as to a strong awareness by foreign enterprises, especially those in the US, to protecting their IP rights in China," Song said.

He said many US companies have applied to Chinese IP authorities for protection of their patents and trademarks, which is why a large number of disputes concern them.

Chen Jinchuan, vice-president of the Beijing IP Court, said the US invests heavily in innovation and applies for patent protection in China the most often.

Song said that with more Chinese companies expanding their business overseas, they should pay more attention to protecting their intellectual property in the countries concerned.

He said very few Chinese enterprises apply for patent or trademark protection overseas, adding, "As China is calling for the development of high-grade, precise and advanced technology, such innovations should be protected both at home and abroad."

Mao Mingqiang, an IP judge from Ningbo Intermediate People's Court in Zhejiang province, said the increase in foreign-related IP disputes is not necessarily a bad thing.

"Some Chinese companies have learned a lot from such lawsuits or have later cooperated on business with their foreign litigants," Mao said.